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A few profiting from the many

“War, poverty, exploitation, and oppression are all products of the capitalist system, a system in which a minority ruling class profits from the labor of the majority.”
— From the ISO “Where We Stand”

We live in a world in which capitalism has spread to every corner of the globe, a market-based, profit-driven system where wealth is used to get more wealth. We are so enmeshed in this system that it appears as though it is as natural as the moon’s orbit around the earth, but capitalism came into being at a certain point in human history and will, like other social systems, pass away.

Exploited labor is the core of capitalism

Labor is the foundation of all human societies from the foraging band—where production and distribution was relatively egalitarian—to our modern industrial system. So soon as society’s methods of production allowed for labor to produce a surplus over and above its own subsistence needs, so soon did we see division of society into an idle ruling class that appropriated the surplus, and a laboring class that produced it.

But previous class societies appropriated the surplus directly, in the form of corn, grain, or some other product of the land that the slave, serf, or peasant produced. Under capitalism, the form of appropriation of the surplus is mediated by the exchange between capital and labor, which appears as an exchange of equal values: wages for labor.

But beneath the appearance of equal exchange of commodities lies the realm of production where exploitation goes on just as surely as under feudal oppression. The source of profit—the money form of surplus under capitalism—derives from the difference between what the capitalists pay out in wages and what labor can actually produce in a given workday.

The foundation for capitalist production is that labor itself must become a commodity. Today, it seems completely natural and normal that there should be a minority that owns the factories, the mines, the schools, the hospitals and offices on one side; and on the other the vast propertyless majority who are by and large compelled, on pain of starvation, to sell their ability to work—what Karl Marx called “labor power”—to those same capitalist owners.

Yet this concentration of the means of production into the hands of the few and the creation of a “free” labor force without anything but its own labor to sell is a relatively recent phenomenon. All class societies are based on squeezing wealth from peasants, slaves, or workers; they are therefore in all cases societies based upon the impoverishment of the majority.

Capitalist impoverishment is particularly virulent, ironically, because capitalism is such an immensely productive system. The constant pressure on individual capitalists to outsell their competitors on the market creates a constant drive for innovation that was unheard of in previous societies; we are awash in wealth that, if used rationally, could provide everyone with adequate food, shelter, education and sanitation.

But as the immense wealth of capitalism grows, the relative portion of that wealth going to the majority of producers dwindles, whether their wages are high or low. In a society where $20 per hour is considered a decent wage that is out of reach to millions of workers, there are billionaires whose wealth is greater than entire countries.
In addition, capitalism depends upon a growing “reserve army of labor”—pools of unemployed workers—in order to exert a downward pressure on wages and protect profits. As a result, the number of people in the world who are stuck in absolute poverty also grows.

The most obscene result of this development is that 6 million children per year die of hunger-related illness while enough food is produced to provide every human being with a decent diet. Worldwide, literally tens of millions of people live on next to nothing, scratching out an existence on the edge of starvation.

Crises of overproduction

The irrationality of capitalism asserts itself most profoundly in the phenomenon of economic crisis, where a rupture takes place between purchase and sale, and the system temporarily breaks down, whole businesses go under, and millions are thrown out of work.

These are, perversely, crises that result not from shortages, but from abundance. They are crises of overproduction, in which goods can no longer be sold profitably, and are therefore not sold at all. Crises are sharp reminders of the way in which production for profit creates the absurd situation in which too much means deprivation.

Whereas overabundance in a rational society based on human need would be a cause for celebration (and shortening the workday), in capitalism it is a cause for alarm and crisis—a crisis in which goods rot and factories lay idle while people who need the goods and are able to work face devastation.

These crises are a product of the unplanned, anarchic character of the capitalist market. Each crisis leads to a recovery in which the “big fish eat the small fish”—that is, the surviving capitalist units gobble up the ones that failed—and a new period of unplanned expansion begins again.

One of the most visible results of this cyclical process of booms and slumps is the centralization and concentration of capital—the growth of bigger and bigger capitalist conglomerates that control more and more wealth.

Capitalism through this economic cycle of boom and bust has gone from being a system of individual capitalists centered chiefly in England, each employing dozens of workers, to a world system of production dominated by giant multinational firms that employ hundreds of thousands.

Wal-Mart, the world’s largest retail company, for example, employs more than a million people and has sales in the hundreds of billions of dollars. What began as the relatively “free” market competition of early capitalism has given way to monopoly—the domination of industries by a handful of giant multinational corporations.

Capitalism was never a peaceful system—force, particularly the armed forces of the state—have always been used to optimize the profit-making capacities of different national capitalist groups. With the growth of monopolies, the role of the state and its armed forces also grew.

As capitalism burst the bounds of national markets, each state marshaled its forces to both protect and expand the markets of its “home” capitalist interests. While warfare and conquest did not originate in capitalism, it has raised both in the level of systematic oppression and destruction it has inflicted on the world.

As capitalism became a world system in the late 19th century, the most powerful states used fraud, theft and violence to carve up colonies among themselves. Divide and conquer—using race, language and other characteristics to pit the exploited against each other—became a crucial method by which the ruling classes attempted to secure their rule.

This conflict between the growth of the world economy and its division between competing national states produced two of the world’s most devastating wars.

To summarize, while the development of tremendous labor productivity under capitalism has produced wealth enough to wipe out poverty and hunger, it has done so at the expense of the majority whose labor has made these changes possible; it has done so, moreover, in such a way as to produce more and more precarious economic crisis, destructive wars and debilitating oppressions, all of which can only be overcome when the system itself is overcome.